Legislature(2017 - 2018)ADAMS ROOM 519
02/27/2018 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB96 | |
| HB273 | |
| HB267 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 96 | TELECONFERENCED | |
| += | HB 273 | TELECONFERENCED | |
| += | HB 299 | TELECONFERENCED | |
| + | HB 267 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 267
"An Act requiring the release of certain records
relating to big game hunters, guided hunts, and guided
sport fishing activities to municipalities for
verification of taxes payable; and providing for an
effective date."
9:39:43 AM
TIMOTHY CLARK, STAFF, REPRESENTATIVE BRYCE EDGMON,
introduced the legislation. He expressed regrets from the
bill sponsor for his absence. He explained the bill would
give municipalities that levy taxes or fees on fish and
game guiding in their jurisdictions access to hunt or sport
fishing records submitted by guides to state agencies. He
elaborated it would provide municipalities with a cross
referencing tool in order to confirm with the various
guiding outfitters who may or may not be in compliance with
their local tax obligations. He emphasized that all such
information released by state agencies to municipalities
would remain confidential under law. He reported that the
bill sponsor believed the tool was important for
municipalities, given that the state had pushed costs to
municipalities in recent years. The sponsor believed
municipalities should have every resource to ensure they
were receiving the revenues due to them according to their
local ordinances.
9:41:40 AM
Representative Wilson asked about the current process. She
used a hunt as an example. She asked if someone had to
register with the municipality. She asked how the bill
would change behavior.
Mr. Clark believed the procedures for guides varied from
municipality to municipality. He used the Lake and
Peninsula Borough as an example and detailed the borough
levied a modest $3 per person, per day tax. The borough's
ordinances (copy on file) had varied stipulations about
reporting to the borough the extent of their hunting or
sport fishing activities within the borough jurisdictions
and making their tax payments according to the backup
reporting also provided to municipalities.
Representative Wilson assumed the Lake and Peninsula
Borough believed people were hunting without registering
with the borough. She surmised the borough hoped the
records would show more people who had utilized the
borough's jurisdiction. She asked if the intent was to then
allow boroughs to bill guides who were identified.
Mr. Clark replied there were around 130 guiding operations
registered with the borough, but during any given season,
because of the borough's large size and the number of
outfitters coming and going over a period of months during
a summer season, it was impossible to keep tabs on each
outfitter. He furthered that because the reports provided
to the state stipulated when and where an outfitter's
guiding activities had taken place, the information could
be used as a cross reference for the boroughs. If the
borough noticed an outfitter had been carrying on
activities in the borough's jurisdiction, the borough could
contact the outfitter to ask them to come into compliance
with its taxing requirements.
Representative Wilson asked whether there was anything in
the bill specifying what would happen if the information
did not remain confidential.
Mr. Clark answered that the bill required confidentiality
to be maintained by the municipalities. Elsewhere in
statute there were criminal consequences for a breach in
confidentiality. He believed the offence was a Class A
misdemeanor in criminal code.
Representative Kawasaki asked why hunt and fish records
were currently confidential.
9:45:41 AM
Mr. Clark answered that for many guides, where they
operated and even the time of year they were in a certain
area was almost proprietary. He elaborated that certain
businesses may categorize an area as a hot spot - a place
where a guide could be more confident in enjoying success
on behalf of their clients. Businesses did not like to
advertise successful locations to competitors.
Representative Kawasaki understood. He asked about the
penalty. He asked if municipalities that would receive the
information would keep it confidential.
Mr. Clark answered in the affirmative. He used the Lake and
Peninsula Borough as an example, which had a "lock and key"
chain of custody procedure that kept the borough well
within the confines of the law and confidentiality
requirements.
Representative Kawasaki referenced testimony from some
guides (copy on file) that the bill would allow for an
equal playing field for guides who were operating
responsibly and paying the fees for customers they were
taking out. He did not know whether the bill specifically
asserted there were guides who were not acting in the same
way. He asked if there was any other hammer available to
municipalities for individuals not operating under the law.
Mr. Clark deferred the question to municipal officials as
circumstances varied by borough. He noted that the Lake and
Peninsula Borough asked for copies of the records that
guides supply to the state, but they had no way to enforce
it. He explained the practice was almost on a voluntary
basis. Based on the large areas many boroughs encompassed
and the large number of businesses conducting business,
there was no way they could economically go after a large
number of delinquent taxpayers.
9:49:22 AM
Vice-Chair Gara understood the information needed to be
shared in order for municipalities to obtain the revenue
due to them. He did not see any language about sharing of
hotspots. He was concerned about the issue. He shared that
one of his favorite fishing spots had become overrun by
people. He asked for verification there was nothing in the
bill specifying that a person needed to release exact spots
they fished.
Mr. Clark deferred the question to the Department of Fish
and Game (DFG). He stated that the specificity, in terms of
locations reported by guides, was greater than naming a
single river. He expressed confidence in the ability for
state and borough employees to adhere to confidentiality
requirements.
Representative Tilton referred to Mr. Clark's mention of
DFG. She mentioned discussion about the logbook program,
which was about to sunset. She noted there had been
difficulty reinstating the program the last time because of
some of the information that had to be provided. She asked
about the departments concerns including what information
it was supposed to share.
Mr. Clark deferred the question to the department. He noted
that the logbook requirement was in regulation. He believed
the sunset pertained to fees and other aspects associated
with the log book program.
9:52:05 AM
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, relayed that
the Department of Commerce, Community and Economic
Development (DCCED) oversaw the Big Game Commercial
Services Board, which spoke to the hunting records side and
contained the same hotspot issue as fishing. The hunt
records, as defined in statute and regulation, required
very specific locations to be disclosed, which in laymen's
terms may equate to a hotspot. She explained that hunt
records were designed for a purpose other than the purpose
being discussed in the bill. The information was important
to troopers and wildlife biologists. As the bill was
written, everything in the hunt record could be disclosed,
including contact information for clients and a great deal
of specific information.
Ms. Chambers referenced past discussion in the House
Resources Committee and the DCCED fiscal note that
reflected the development of a report that would take the
information pertinent to the municipal tax requirement and
work with the municipalities to discern what information
was wanted. The department could then quickly provide a
report on demand. The capability would be efficient and
would not burden anyone with concerns about hotspots and
client information. While the bill would reflect the
municipalities' ability to request hotspot information,
DCCED hoped to establish a compromise that would be less
costly for municipalities.
Representative Tilton hoped to hear from DFG as well. She
had worked on legislation related to the saltwater guide
logbook, which had been a contentious issue.
Co-Chair Foster replied he would request for DFG to attend
the next meeting.
Representative Pruitt recalled that in 2014 the legislature
had passed legislation allowing the state and
municipalities to share tax records. Prior to the law
change, the entities could not communicate. He remembered a
situation where the state had known a car rental agency was
not paying city taxes, but the state was not allowed to
communicate it to the city. Statute had been passed to
address the issue. He asked if the current bill was needed
because they were not talking about a tax from the state
level; it was a tax at the borough level. He thought
perhaps because there were not two sets of taxes and
municipalities were just seeking records, which was not
currently authorized under statute.
Mr. Clark agreed.
Representative Pruitt noted that operators had to fill out
separate sets of information for the state and borough. He
asked if the bill would allow operators to file one report.
9:56:45 AM
Mr. Clark replied his understanding was that the bill would
streamline the paperwork for guides. He used the Lake and
Peninsula Borough as an example and explained the borough
did not necessarily require guides to fill out the
borough's own hunting report, but it requested copies of
the report submitted to the state. He did not believe the
boroughs had any actual legal authority to force them to
provide the copies. Guides who had been in compliance would
be saved from duplicating and copying of a season's worth
of activities. He believed the paperwork for the borough
would be reduced to something resembling a one-page tax
filing document.
Representative Pruitt asked if there was an estimate of
revenues lost to the borough due to bad actors who were not
complying with requests.
Mr. Clark responded that the one estimate he had heard was
from the Lake and Peninsula Borough finance officer was
approximately $50,000 to $100,000 in lost annual revenue.
The amount was significant for boroughs with an annual
budget around $3 million.
Representative Pruitt asked there were other boroughs or
municipalities that would be using the tool provided by the
bill.
Mr. Clark answered that the City of Yakutat, the City of
Sitka, the Kodiak Island Borough, and the Aleutians East
Borough may all benefit from the legislation. He was not
familiar with the local taxes in these locations. Fully
determining the beneficiaries was a work in progress.
10:00:12 AM
Representative Kawasaki referenced bad actors known [to
municipalities] and no other way to get the information. He
pointed to bill language specifying that the information,
including hunt records, could be requested by other state
agencies; and federal and other law enforcement agencies.
He asked if it did not include the Lake and Peninsula
Borough's code compliance office that could already ask for
the information if they knew who they were looking for.
Mr. Clark clarified he did not want to characterize every
guide operation delinquent in local taxes as bad actors. In
some cases, operators may be unaware of borough
requirements or their season could be busy, and things
could get put by the wayside. He believed the question
would best be addressed by a borough official. His
understanding was there was currently no real practical way
for boroughs to chase down the significant number of
operations that may be delinquent in their local taxes. In
some cases, boroughs simply heard from someone in town that
a guide flew into town that week with six clients, spent
seven days, and flew out again. Under the scenario, a
borough official may realize the borough had never heard
anything from the guide. Often, in those circumstances, the
borough made a call to the guide and most often the guides
were happy to comply with tax requirements.
10:02:33 AM
Ms. Chambers replied that the section of statute pertaining
to hunt records and transporter activity reports had been
interpreted to mean any state agency and any law
enforcement agency as defined in statute as a police-type
of law enforcement. Municipal code enforcement had not been
interpreted to fall underneath the definition, which she
believed was the reason for the bill. The department
published a list (online) of the guides who were qualified
to operate in every guide-use area, which was available to
any municipality to help educate. Municipalities were able
to download the information and reach out to each guide to
make sure they know about the municipal requirements. She
remarked that the Lake and Peninsula Borough had an IRS-
style tax form. The board's understanding was that guides
would still have to fill out DCCED's hunt records and the
tax form that included the number of hunters and nights
stayed. The department had not been informed by any
municipality that they were planning on filing the
information on the guide's behalf. From the guides'
perspective the paperwork would not change unless a
municipality was anticipating changing their system as a
result of the bill.
10:04:28 AM
Representative Wilson there was a way for a guide to mark
the municipality when they filled out a hunt application.
She was uncertain about the full record going [to the
municipality]. She believed the only thing the
municipalities needed to know was that someone was hunting
in their jurisdiction who would be required to fill out the
paperwork. She asked if it was something that could already
be done when filing an application [to DCCED].
Ms. Chambers answered that the forms were all adopted
through regulation. She affirmed it was possible for the
board to amend the forms. The department already input the
law information into a database to make the work of federal
and state agencies easier. The department was proposing,
via its fiscal note, to work on the database more to be
able to generate a report along those lines. The idea was
to provide information that would help municipalities and
not provide information that was irrelevant.
Representative Wilson surmised the intent of the department
would be to include some type of associated fee to make the
change cost neutral.
Ms. Chambers replied in the affirmative.
10:06:22 AM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE (AML), reported that AML was in favor of the
legislation. As more cuts to municipalities and transfer of
duties resulted from state issues, municipalities needed
every tool possible in order to maintain finances at a
sufficient level in order to operate in an effective and
efficient way. She stated the bill was a tool that helped
minimalities. She knew there had been numerous questions by
legislative committees about what happened if municipal
employees divulged confidential information. She did not
understand that concern. She did not know what had happened
to make so many people distrustful of municipal government.
Municipalities all dealt with taxation and she had never
heard of things happening where someone had inappropriately
talked about those sorts of things. She acknowledged it had
probably happened in municipalities and the state alike.
She stressed the bill provided a tool to enable
municipalities to get their finances back to a more
operable point. Currently, in large boroughs such as Sitka,
there was no way to know who flew into town in any
particular year. She elaborated that new people came from
the Lower 48 to hunt - there was no way for the borough to
know the information without getting some records. She
believed the primary thing the boroughs needed was what had
been charged for a particular trip. She noted it had been a
problem for the City of Pelican as well. She knew the issue
was a problem throughout Alaska. She asked the committee to
pass the legislation.
Representative Wilson thought the bill was more about
fairness than budget cuts. She reasoned that some guides
were paying what they should, while others may know and
decide not to pay. She thought the bill was needed
regardless whether the budget had been cut because it
pertained to revenue that could be utilized by boroughs.
Ms. Wasserman believed Representative Wilson was right. She
did not know if the issue was more about fairness, but it
was certainly part of the issue. From the standpoint of
municipalities, it was about the lack of ability to receive
tax money that was owed. She agreed that from the
perspective of responsible taxpayers, the issue was about
fairness.
Representative Wilson spoke to confidentiality and believed
the concern was not only about the particular bill. She
expounded that the state took in a substantial amount of
information for all sorts of things. She believed
confidentiality needed to be considered with each piece of
legislation to determine how far the information provided
by the public would go.
Ms. Wasserman believed Representative Wilson was right. She
underscored the information needed to be laid out very
clearly in order for everyone to understand upfront what
they were providing and what would be used.
10:10:32 AM
SUSAN EDWARDS, FINANCE OFFICER, LAKE AND PENINSULA BOROUGH,
KING SALMON (via teleconference), spoke in support of the
bill. She testified that the need for the borough to know
location came down to guide-use areas. She detailed that
some guide-use areas were split between boroughs. One of
the issues the borough dealt with was determining which
borough the guide was operating in. Currently it was easy
for a guide to say they were not operating in a particular
borough. The borough would like to know with certainty
where the guide was operating. The borough was in a very
large roadless area and the finance department had a staff
of two. Therefore, having the information to verify who was
operating in the borough and who was not, was very
important.
Representative Wilson asked about the issue of being in two
boroughs at the same time. She asked if the borough's tax
applied to a person hunting within the borough's
jurisdiction or only when a person took an animal within
the borough's jurisdiction.
Ms. Edwards answered that the tax applied when an animal
was taken. Guides were required to register in a guide-use
area, which was public information. The borough monitored
the information and reached out to guides who had not
registered with the borough and were hunting in a split
game-use area. Many guides were forthcoming about where
they had been hunting in a game-use area and a few were
not. Without any way of verifying what the borough was
being told - it was put in a situation of not knowing the
veracity of the information they were told. When someone
told the borough, they had been just across the border, it
could be true that the individual may not have known their
precise location; it may be an honest mistake on the
guide's part. The information provided by the bill would
offer verification and clarity.
10:14:32 AM
Representative Wilson asked for the mechanism the borough
would use to collect the tax. She wondered if the mechanism
was in place or the borough was just hoping that once it
knew a guide had been operating in the borough that they
would send the payment.
Ms. Edwards replied that the borough knew who was hunting
in the game-use areas that were fully or in part in the
borough's jurisdiction. The borough reached out to all of
the guides operating in its jurisdiction and asked them to
register. The borough asked for a quarterly tax filing,
which was a single sheet of paper. Additionally, it had
created a self-calculating form, meaning the guides only
had to fill in the number of people and the days in the
field. The borough had worked to make filing taxes as easy
as possible for guides. She stated the issue came down to
being able to verify the information the borough was told
and to identify guides who were unaware they were operating
in the borough, unaware of the need to register, or were
not reporting at all.
10:16:20 AM
NATHAN HILL, MANAGER, LAKE AND PENINSULA BOROUGH, KING
SALMON (via teleconference), testified in support of the
legislation. He spoke to numerous reasons for the borough's
support. The borough's code required professional hunting
and fishing guides to register with the borough and pay a
$3 per day, per person use tax when operating in the
borough's boundaries. The borough imposed the tax for the
same reason it imposed a severance tax. Like commercial
fisheries activities, the borough taxed other commercial
activities. The taxes applied on all borough lands. The
commercial fisheries could access processor data to verify
fish tax revenue, unlike the current status with guide
activity reporting. Without access to state guide activity
report, the borough had no way to verify whether the
activity reported (to the borough) was accurate. The
borough did not have a way of knowing who was operating and
whether or not they were in the borough's jurisdiction. He
stated situation was inequitable for guides operating in
compliance and was unfair to the residents of the borough
who relied on the resources and generated taxes. He
referenced letters from other operators that the bill would
result in the reduction of paperwork. He thanked the
committee for the opportunity to testify in support of the
legislation.
Co-Chair Foster CLOSED public testimony.
Co-Chair Foster asked committee members to provide any
amendments by Friday, March 2.
Representative Wilson wanted clarity on someone hunting in
two different areas. She used the Lake and Peninsula
Borough as an example where a hunter may be operating in
its jurisdiction or under Kenai's jurisdiction. She
referenced testimony that the tax was based on where an
animal had been taken. She provided a scenario where Kenai
had the same tax as the Lake and Peninsula Borough. She
asked if a person was hunting in both jurisdictions for
five days whether the tax for the full five days would go
to Kenai if the animal was killed in its district.
Alternatively, she wondered if part of the tax would be
paid to the Lake and Peninsula Borough if the guide had
been operating within its jurisdiction for part of the
time. She noted it was easy if a person was all in one
borough.
Mr. Clark responded that he was not familiar enough with
the borough's finance officers on the ground practice. He
deferred to Ms. Edwards from the Lake and Peninsula
Borough.
Ms. Edwards answered that the hunt reports specify the
location where an animal was taken. Part of the rationale
behind the tax was a severance tax. The basis was to tax at
the point where the animal was harvested.
Representative Wilson asked for verification that if she
was on a five-day hunt it would not matter that a guide had
traveled back and forth between two jurisdictions. She
surmised the person would be charged based on where the
animal was taken.
Ms. Edwards answered in the affirmative.
Representative Ortiz thought the situation was unworkable.
He thought the revenue should go to wherever the business
was located. He did not know how it would work if a hunter
took an animal right on the border [between two
jurisdictions]. He reasoned the hunter may not know the
location. He thought a workable policy would be revenue
collected wherever the person had their business.
Ms. Edwards answered that the majority of guides operating
in the borough were not borough residents. There were a
significant number of guides that were not state residents.
She considered the severance aspect and explained the
borough viewed the issue as people coming from outside and
taking borough resources. For the small amount of taxes
they had, it was more than reasonable to have money coming
in from the outside whether taking fish from the water,
minerals from land, or hunting animals.
10:24:14 AM
Representative Ortiz asked if the businesses themselves did
not have a local entity.
Ms. Edwards answered that the businesses were not local.
She elaborated that the businesses ranged from Montana,
Texas, West Virginia, Tennessee, Anchorage and Mat-Su. The
businesses had no presence within the borough.
Co-Chair Seaton asked if a hunt that was unsuccessful did
not have to pay anything. He thought the tax was based on
participation per day as well as a severance tax. He hoped
that if people were using the borough to conduct business
that the borough could collect the daily fee.
Ms. Edwards answered that hunt reports were submitted
whether the hunt was successful or not and were specific as
to the location the guide had been operating in. She
assumed the report was submitted for purposes of game
management and biological data. While the tax pertained to
area the animal was taken, it was also about the area the
operator had been hunting. In talking to guides, the
borough tended to err on the side of the guide. There were
fairly detailed maps and there was very little crossing
back and forth of boundaries. Given that the borough was
the size of West Virginia, places where most of the guides
hunt (that were known to the borough) were well within the
borough.
Mr. Clark clarified that Ms. Edwards had been providing the
answers.
10:27:41 AM
Vice-Chair Gara did not have a concern over his earlier
question related to enforcement. He stated that absent some
major expense on enforcement, guides would report their
activity within the proper borough. He knew for a fact on
one state record animal that guides would not necessarily
report the exact location an animal had been taken,
although it would be within the appropriate jurisdiction.
He reasoned if the state had a real concern about making
sure reporting was 100 percent accurate in every case, it
would have to spend more money on enforcement than it would
ever recoup.
Representative Wilson was concerned about the amendment
deadline. She noted that she and Co-Chair Seaton had
received different answers to the same question about how
the tax was determined. She wondered if hearing from DFG
would help. She thought that a person was required to take
a GPS moose hunting to record where the animal was taken,
which was a way for DFG to know where resources were being
taken. She mentioned the guide area and asked how much the
state was asking for guides to report. She agreed there may
not be many areas where guides crossed over between borough
boundaries, but she did not know how many times it could
happen. She wondered if the state would need more
information than where the animal had been taken. She
thought it could end up being much costlier than
anticipated. She requested to hear from DFG before
amendments were due.
Co-Chair Foster asked Mr. Clark to get something in writing
from DFG prior to the next committee hearing on the bill.
He held off on the amendment deadline.
Representative Guttenberg noted that the bill provided a
tool to track what was taken and who was in the borough. He
stated that the process was already in place.
Co-Chair Seaton clarified that the state was not charging
any fees. The bill would merely allow municipalities to
access existing state records for their own enforcement of
their own tax system; the information would be kept
confidential. The bill would not implement any regulations
or impose any new conditions on where an animal was taken.
He provided a scenario where a guide told the borough it
had only had three people hunting for a week, the borough
could verify the guide had reported [to the state] that it
had five to seven clients in the area on seven different
occasions. The bill would allow the boroughs to verify
reports being made for tax purposes. He was less concerned
than if the state was imposing some new requirements on
guides or hunters.
10:32:26 AM
Co-Chair Foster believed the bill was simply seeking to
access records by municipalities. He tentatively maintained
the amendment deadline of Friday, March 2.
Representative Wilson added that DCCED staff had testified
the department was considering a different type of
application where an applicant would mark their location.
The department was not necessarily looking to disclose the
entire report to municipalities. There could be some
changes or possible regulations. She requested to receive
the information [from DFG] prior to Thursday.
Mr. Clark added that it was not the sponsor's intent that
the information released to municipalities be limited in
any way. The sponsor was confident in the professionalism
of the municipalities and their ability to keep
confidential information confidential. He believed DCCED
should share the confidence.
HB 267 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the agenda for the following
meeting.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 267 CSHB267(RES) Sponsor Statement 2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Supporting Documents--Letters and Resolutions in Support 2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Supporting Document--Legal Consequences for Violating Confidentiality 2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Supporting Document--Lake and Peninsula Borough Municipal Code Title 6--2.23.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 CSHB267(RES) Sectional Summary--Release of Hunting and Fishing Records to Municipalities 2.26.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 267 Explanation of Changes--HB 267 Version D to Version O 2.26.18.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |
| HB 96 Amendment #1.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 96 |
| HB 267 Supporting Document--Lake and Pen Borough Clarificatioin--Policy on Guided Trips 2.27.2018.pdf |
HFIN 2/27/2018 9:00:00 AM |
HB 267 |